Euro Pain Fuels 31% Dive in Dow Chemical's 2Q Profits

Dow Chemical (DOW) disclosed a deeper-than-expected 31% stumble in second-quarter earnings on Thursday as the largest U.S. chemical maker was struck by slumping prices and shrinking demand amid the weakening global economy.

Shares of Dow Chemical slid almost 3% Thursday morning in reaction to the gloomy results.

Midland, Mich.-based Dow said it earned $734 million, or 55 cents a share, last quarter, compared with a profit of $1.07 billion, or 84 cents a share, a year earlier. Analysts had been calling for stronger EPS of 64 cents.

“Sustained uncertainty in the world economy continues to present a challenging operating environment, and this quarter was no exception. Weak demand due to a slowdown in global growth drove declining prices,” CEO Andrew Liveris said in a statement.

Volume and pricing both fell by 5% last quarter amid increasing economic turbulence. Pricing tumbled 8% in Europe, which continues to grapple with a scary sovereign debt crisis and double-dip recession.

Sales in Europe dropped 10% amid a $400 million negative impact from adverse currency conditions as the euro continues to devalue.